Friday, December 9

Pelosi’s possible visit to Taiwan makes Asian stock markets fall


The possible visit of the president of the House of Representatives of the United States, Nancy Pelosi, to Taiwan caused the stock markets of Asia to plummet this Tuesday due to the concern of the investors for the risk of escalation with China.

Traders, already nervous after a series of announcements showing that economies were beginning to suffer from rising inflation and central bank interest rate hikes, now fear a destabilization in the region if China retaliates against the visit from Pelosi.

The Speaker of the House of Representatives would be, if confirmed, the highest-ranking US official to visit Taiwan since his predecessor Newt Gingrich in 1997.

Beijing, which regards the island as part of its territory and has vowed to one day reclaim it, has warned that would consider that visit as a provocation and has made strong statements in recent days.

Although most observers consider lowers the likelihood of armed conflictUS officials have said they are preparing for possible displays of Chinese military force, such as missile strikes in the Taiwan Strait or massive air raids around the island.

The Hong Kong and Shanghai bags they suffered late in the morning, losing about 3% each. Taipei fell 1.8% and Tokyo more than 1%. In the rest of the region, Seoul, Singapore, Jakarta, Sydney and Wellington also fell.

the yen rises

Hong Kong and Shanghai stocks lost around 3% each in morning trading, while Taipi fell 1.8%.

Tokyo fell more than 1% while Sydney, Sel, Singapore, Wellington and Jakarta also recorded declines.

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In the foreign exchange market, the Japanese yen, considered a haven investment, rose to its highest level in two months against the US dollar, while the Taiwanese dollar fell 0.7%.

“The risk is increasing,” said Stephen Innes of SPI Asset Management.

“It is almost certain that Pelosi will visit Taiwan this Tuesdayso it’s in the hands of China to see if the situation escalates”added Innes, after noting that “it could be nothing more than a storm in a glass of water, but international and Taiwanese investors are quite worried.”

“Nobody wants a real war, but the risk of a mishap or even an aggressive escalation of military games is real, and can always lead to a tactical error,” he warned.

The spike in tensions comes less than a week after the presidents of the United States, Joe Biden, and from China, Xi Jinping, they talked on the phone. The Chinese leader warned his peer not to “play with fire” in relations with Taiwan.

“Pelosi has the right”

The Speaker of the US House of Representatives has the “right” to visit Taiwan, the White House insisted on Monday after the Democrat began a tour of Asia amid growing tensions with China.

“Singapore Prime Minister Lee Hsien Loong stressed the importance of a stable relationship between the United States and China for regional peace and security,” according to a statement released by the Singapore Foreign Ministry.

The delegation led by Pelosi will also visit Malaysia, South Korea Y japanbut the expectations about a possible stopover in Taiwan focus the attention of the tour.

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“You have the right to visit Taiwan,” John Kirby, a spokesman for the White House National Security Council, told reporters.

“There is no reason for Beijing to convert a possible visit, consistent with US policy long ago, in a kind of crisis,” he added.

Taiwan “determined” to fight back

Taiwan’s Defense Ministry said Tuesday that it is “determined, capable and confident” that it will be able to protect the island from growing threats from China on the sidelines of a possible visit to the island by the Speaker of the House of Representatives. United States, Nancy Pelosi.

“We are meticulously preparing various plans and adequate troops will be deployed to respond, adhering to emergency response rules, to enemy threats,” the Taiwanese ministry said in a statement.

Reports of a plan to visit Taiwan have outraged China and provoked annoyance even in the White House, amid attempts by President Joe Biden to defuse tension with Beijing.

For his part, the Chinese ambassador to the UN, Zhang Hun, described the visit as “very dangerous, very provocative,” in statements to journalists.

The island lives with the fear of an invasion

China regards Taiwan as a province that has not yet managed to reunite with the rest of its territory since the end of the civil war and repeatedly evokes the possibility of recovering it, by force if necessary.

The Chinese government opposes any initiative that gives international legitimacy to the Taiwanese authorities.

This island of 23 million inhabitants lives with the fear of an invasion, but this threat has intensified during the presidency of Xi Jinping.

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The US has maintained since 1979, when it established relations with Peking, a “strategic ambiguity” towards Taiwan: a deliberately opaque policy under which it refrains from clearly indicating under what circumstances it would intervene militarily to defend the island.

On the diplomatic level, it recognizes Beijing and not Taipei, but supports the democratic government of Taiwan and opposes a change by force in the status of the island.

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